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Feb. 9 (Bloomberg) -- OAO Rostelecom’s Mobitel unit opened a 10.7 billion ruble ($360 million) credit line with OAO Gazprombank to fund a share buyback, according to a regulatory statement by Rostelecom today.
Rostelecom today announces that its subsidiary, Mobitel LLC (“Mobitel”), has completed the acquisition of 3.86% of Rostelecom shares for a total cash consideration of 19 billion ruble with the help of debt financing. As a result, Mobitel’s ordinary share stake in Rostelecom increases to 6.55%.
To limit the dilution of the Company’s free float, as well as any stock price fluctuations caused by an open market share buyback, the 3.86% stake in Rostelecom’s ordinary shares has been accumulated by VTB Capital Plc and Renaissance Securities (Cypus) Limited on behalf of Mobitel. The shares were acquired from minority shareholders through the over-the-counter (OTC) market.
This additional stake is expected to be used to facilitate strategic acquisitions, or it may be sold during the Company’s SPO, depending on the status of the securities market.
Gazprombank plays a large role in implementation of Russian government’s initiatives to support the banking sector and economy.
The bank also handles Gazprom’s operations. Gazprombank OAO (Russia) is the sole shareholder of Armenia-based Areximbank- Gazprombank Group CJSC.